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Common Short Codes:Cracking The Mobile Marketing Code
October 2007Prepared by: Evan Neufeld, Senior Analyst
Executive Summary
 Although at an early stage when compared with more mature advertising mediums such as television, radio, print, andeven the Internet, mobile is quickly emerging as an impactful advertising channel. According to industry estimates, wellover one billion dollars will be spent on mobile advertising globally in 2007, and by all accounts the mobile advertisingmarket is poised for exponential growth over the next several years.There are several obvious reasons for this growth; the most often cited is the rate of mobile phone adoption itself, withglobal penetration of mobile phones on track to surpass three billion in the next few years, according to industryestimates. As is often the case with advertising, it is the lure of massive numbers of eyeballs fixed on a "third screen"that is drawing brand marketers to this medium.The attraction here is not merely about the sheer number of devices in the marketplace, it is about the specific nature of the mobile phone as a potential marketing medium. And, like the Internet before it, the mobile phone has the potential tobe an unprecedented platform for marketing. Its portable, intimate, and data-intensive nature makes the mobile devicethe perfect personal connecting point in an increasingly digital world.The question advertisers ask about mobile, as they did when television, cable, and the Internet started to aggregateaudiences, is: What type of advertising should I buy, and what type of marketing activities is this new medium best suitedfor, given my products/services and target market segments? This white paper lays out the numerous options for amarketer seeking to interact with mobile subscribers:
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Messaging (SMS, MMS)
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WAP (Search and Banner Ads)
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Downloadable Applications (e.g., Games)
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Mobile Video (Broadcast TV)Few methods can make as compelling a case for adoption and usage than Common Short Code (CSC)-basedmessaging outreach. Among the many advantages CSCs provide a brand advertiser today are:
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Easy access to large, addressable audiences
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Integrated marketing communications around a prevalent, ubiquitous activity (text messaging) vs. a niche one(e.g., mobile browsing)
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Unique advantages in terms of simplicity of use and cost to execute
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Demonstrated impact and effectiveness across a host of campaign types and objectives — a proven method
Note:
Unless otherwise noted, all data herein is from M:Metrics Mobi Lens Product for (3 month avg) ending AUG 2007(n = 33,271 Mobile Phone Users), US. In several instances here, we use a benchmark Index. Such indexes simplycompare a group against a specific market average. Average = 100
 
 
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1. The Mobile Marketing Opportunity: Breaking Through Gridlock
Mobile Phones: Unique, Personal Connection to the Digital World
 
Consumers are increasingly inundated with advertisements: each of us sees more ads in one day than people of 50years ago saw in an entire lifetime. In this world of increasing competition for both eyeballs and mindshare, the mobilephone - almost always switched on and accessible - presents a unique opportunity for brands to cut through the clutter and engage consumers in meaningful, one-on-one dialogues.
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It Is Digital:
As mobile devices become more like miniature PCs and less like phones, their ability to facilitatemarketing objectives only grows, including everything from storing credit card data enabling mobile paymentsto tracking complex click-streams of consumer responses to ads. Such an ability puts the mobile platform,along with the Internet, far ahead of more traditional media options (such as television and print), which areless measurable. The digitization of content also allows brands to make advertising messages morepersonalized and more interactive.
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It Is Targeted:
The vast reach of the medium, combined with its potential to offer location and presence-based targeting, combined with behavioral/purchasing habits, offers marketers the opportunity to deliver onthe fabled mantra of reaching the "right consumer with the right message at the right time."
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It Is Convergent:
Sitting at the nexus of voice, the Internet, and media, the mobile phone is unique in itsposition as the convergent device that will be the consumer’s main connection point for friends, their favoritecontent and entertainment, and engaging in a host of activities and interactions. Today, technology is beingwoven into the very fabric of our social culture, offering advertisers the ability to extend their reach toconsumers much more effectively and immediately.
 As convergence disrupts multiple sectors, the mobile phone emergesas the key personal connection to the digital world 
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It Is Uniquely Personal and Portable:
Given media fragmentation and consumers’ increasing desire tocontrol their media and entertainment consumption, advertisers are recognizing that they must have closer interactions between their brand and the consumer to get their message across. The portable and personalnature of the phone combined with its expanding capabilities places it prominently among consumers’ mostimportant possessions. This unique combination creates fertile ground for brands to want to place relevant,contextual messages.
The Mobile Revolution: Personally Connecting with the Next Billion People
The past five years have borne witness to a mobile revolution around the world, with penetration levels exceeding 80percent in most developed countries. Underlying this growth are several key developments, which together have drivenmany marketers to begin reviewing the role mobile has to play in their marketing mix. Primary factors contributing tothe growth of this marketplace include:
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Global Footprint of Mobile Phones to Grow to More Than 3 Billion:
The phone’s ability to provide globalreach to consumers is only increasing: the global market for mobile phones is poised for strong growth over the next several years, with several projections estimating 40 percent growth between now and 2011.
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Mobile Phone Penetration Passed Critical Mass in United States and Western Europe:
According toM:Metrics, approximately 86 percent of the population (age 13+) in the United States own a mobile device(as of Aug ’07). In The EU 5, the penetration numbers are equally high: 89 percent for the UK, 88 percent for Italy, 87 percent for France, 85 percent for Spain, and 65% for Germany.Not only is mobile phone penetration experiencing strong growth, mobile advertising and marketing is experiencingexceptional growth as well. According to IDC, well over one billion dollars will be spent on the medium globally in 2007,and by all accounts the mobile advertising market is poised for exponential growth over the next several years: E-Marketer values the global mobile ad market at over $16 billion by 2011.
Table 1: Mobile Marketing Opportunity, by the Numbers
Mobile Marketing Opportunity, by the Numbers
(in billions)
Global Mobile Marketing Ad Spend, 2011 $16US Mobile Marketing Ad Spend, 2011 $2.9Total # Mobile Subscribers, 2007 2.7Total # Mobile Subscribers, 2011 3.9
Source: M:Metrics (based on aggregation and averaging of various industry projections)
 
Marketing spend is predicted to be widely distributed across several types of mobile marketing methods — from in-video advertising to WAP-based banner ads.
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